USD/JPY is trading with risks skewed higher. The rate is underpinned by JPY-funded carry trades amid positive global risk sentiment (VIX fear gauge eased 4.48% to 11.3, S&P rose 0.56% overnight) as surprise 10,000 drop in latest U.S. weekly jobless claims to 332,000 (vs. forecast for rise to 350,000) boosted optimism over the U.S. economy; while a number of big U.S. banks announced plans for dividends and stock buybacks after release of stress tests by Federal Reserve. USD/JPY is also supported by demand from Japan importers and investment trusts; expectations of aggressive monetary easing from Bank of Japan to achieve 2% inflation target. But USD/JPY gains tempered by Japan exporter sales; positions adjustment before weekend.
Sell below the pivot point with 96.25 with targets at 95.45 and in extension.
S1 – 95.44 (Wednesday’s low)
S2 – 95.2
S3 – 94.79 (March 8 low)
Buy above 96.25 and look for upside targets at 96.7 and 97.02.
R1 – 96.71 (Tuesday’s three-and-a-half year high)
R2 – 97.00 level
R3 – 97.78 (Aug. 7, 2009 reaction high)
Daily chart is positive-biased as MACD is bullish, while stochastics stays elevated at overbought; five-day moving average is above 15-day MA and rising.
The material has been provided by InstaForex Company – www.instaforex.com